India’s financial markets will increasingly be affected by global events and changes to worldwide regulation, especially those introduced after the 2008 financial crash.

The City of London Corporation’s report, carried out by IMRB International and titled ‘The Impact of Global Regulatory Change on India’s Financial Markets’, was based on interviews with high-level representatives from India’s financial and professional services sectors, including banks, law firms and credit rating agencies.

Mark Boleat, policy chairman at the City of London Corporation, said: “As India’s economy continues to steam ahead, the impact of global regulation on its financial markets will need ever closer scrutiny and evaluation. This report shows that as India’s capital markets do not exist in isolation, international regulation, and how it is applied, potentially could stifle the growth and development of emerging financial markets.

During the interviews, the respondents were asked about global financial regulations, with a particular focus on European and US reforms such as Basel III, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Foreign Account Tax Compliance Act (FATCA) and the UK’s Bribery Act. They were asked to reflect on how they were perceived in India, the awareness levels and impact of each on India’s capital markets.

Basel III, because of its global nature, was viewed to have the biggest impact on banks and financial institutions. This was seen as likely to result in changes to business models and customer strategy and also an increased cost of compliance. There was, however, no particular opposition towards Basel III in India.

FATCA was seen to impact on all financial institutions with business interests in the US and would incur changes and costs as result of the business process introduced – especially ‘Know Your Customer’ requirements.

The UK’s Bribery Act 2010 was viewed as particularly stringent and has resulted in corporates and multinational banks incurring high costs on risk mitigation activities.

The Dodd-Frank Act’s impact, with the exception of the Volcker Rule, was unclear across many respondents.

In general, the City of London Corporation believes that the report highlights the importance of effective global integration of regulation, with principles such as the need for simplification, the creation of a global playing field and a reduction in the stringency of regulation in some business areas recommended by the interviewees.

Marking a break with the series of gung-ho reports about India’s economic prospects, global ratings agency Moody’s has red flagged the inability of the NDA government to push through vital reforms and said this could “derail medium- to long-term growth prospects”.

“The downside of not delivering reforms will be punishing. GDP growth is not likely to rise above 7.5% if the government continues to overpromise and not deliver,” it said in a recent report.

Moody’s acknowledged that the economy has been in a cyclical upswing since late 2014, but also pointed out that private investment remains elusive, thus, contributing to the economy’s failure to gather momentum. “The government’s failure to deliver promised reforms (such as the land bill and the goods & service tax bill) is the major impediment,” it said.

India Inc has learnt that influential sections of the Narendra Modi government are veering around to the view, first articulated by some BJP chief ministers at a NITI Aayog meeting earlier in July, that it may be a good idea to withdraw all the contentious amendments in the NDA’s land bill – such as doing away with the requirement of seeking the consent of land losers and also scrapping the need for a social impact assessment clause – to make it politically acceptable to opposition parties, which have opposed these on the grounds that they are anti-farmer and pro-corporate. Individual states can then amend the central law to remove these clauses to make themselves attractive to potential investors.

Competition among states to attract investors and create jobs will, over time, force even those opposed to these amendments to fall in line, the proponents of this view feel. Be that as it may, there is little likelihood of this legislation being passed anytime soon. The BJP is not keen on pushing it so close to the crucial assembly elections in Bihar, a politically important agrarian state.

The Moody’s report rates the likelihood of this legislation being passed this year as “low”. However, it added, that the passage of this bill is critical for lifting the country’s economic growth as many domestic and foreign investors remain wary of committing to large investments for fear of their money getting stuck for years.

The GST Bill, the second major reforms measure that is critical for raising India’s GDP growth rate to 10 per cent, also remains stuck in the political wrangling between the BJP and the Congress. With hopes of a political compromise fading, analysts are keeping their fingers crossed. But here, the government is on slightly stronger ground, as several smaller, regional parties support its passage.

Incidentally, of the seven dissent notes submitted by the Congress against the bill, six are against provisions that were present in the bill tabled in the previous Parliament by former Congress Finance Minister P Chidambaram.

If the government is unable to pass the bill in the current session of Parliament, it will be difficult to roll out GST with effect from April 1, 2016. And this, in turn, will push back India’s wait for higher GDP growth rates by another year.

Moody’s has also red flagged the government’s proposal to curb the powers of the Reserve Bank of India to set interest rates. A draft bill on the issue proposes a seven-member rate-setting committee with four members being nominated by the government. The draft also proposes to scrap the RBI governor’s veto power to overrule the decision of the committee. Taken together, these two provisions will give the government complete control over the process of setting policy rates that determine inflation control measures and lending and deposit rates of commercial banks.

“We believe that tampering with the central bank’s independence would make it difficult to anchor inflation expectations. This would weigh on India’s economic prospects, particularly financial market stability,” Moody’s said in its report, which added that any growth rate of less than 10 per cent would be sub-optimal compared to India’s potential.

Though the prospects of a normal monsoon have raised the possibility of more rate cuts, considerable hurdles have appeared in the path of India moving to a higher growth trajectory.

These hurdles are mainly political in nature and will test New Delhi’s political management skills to the fullest.

The Tata Group’s international business helped push its revenues up by 5.3 per cent last year, with the Indian business house contributing £8 billion to the UK’s GDP in 2013-14.

Cyrus P. Mistry, chairman of Tata Sons, told the group’s leadership and senior management at the Annual Group Leadership Conference (AGLC) in Mumbai that the group increased its revenues to $108.78 billion for 2014-15, up from $103.27 billion in the previous year.

Nearly 68 per cent of these revenues came from International markets, including the UK and Europe, and the group invested about $10 billion worldwide during the year with over 65,000 employees across more than 40 UK towns and cities.

The group closed the financial year with a market capitalisation of $134 billion, up 17 per cent over the previous year.

Mistry said: “Sustainable profitable growth is the key building block for long term stakeholder value creation.”

He said the Tata group would need to maintain its success in a changing world marked by “global volatility and an inexorable shift towards a digital future”.

He also highlighted the opportunities all across the globe and those presented by a rapidly growing Indian market, whose relative importance in the global economy would “substantially increase by 2030”.

The Tata Group’s UK-focused ventures include Jaguar Land Rover (JLR), the country’s biggest investor in R&D in the manufacturing sector; Tetley, the second-largest tea brand globally and among the most bought tea brands in the UK; and Tata Consultancy Services (TCS), which serves more than 350 clients in Europe, including British Airways, BT, Marks & Spencer and the UK Home Office.

The European Bank for Reconstruction and Development (EBRD) has signed an agreement with the Associated Chambers of Commerce and Industry of India (ASSOCHAM) to facilitate co-financing opportunities.

The aim of the MoU signed today is to strengthen ties between EBRD and Indian corporations in the regions where the bank is active.

EBRD vice-president Phil Bennett said: “We already work with some very high quality Indian companies in our countries of operations. By deepening our cooperation with ASSOCHAM we will be able to reach out to many more Indian partners as we invest to support countries that are still making the transition to market economies.

“The EBRD has already had a number of successful investments in cooperation with Indian companies, but there was scope to do much more.”

EBRD has so far invested a total of over €870 million together with Indian firms. It has teamed up with the Tata group in the Shuakhevi hydropower plant in Georgia, which is helping the country make the most of its abundant water resources and achieve greater energy independence.

It has also worked in Georgia with the JSW steel group, with whom it invested in a steel mill in the town of Rustavi and in Russia, where it teamed up with Tata Beverages.

In addition, the bank has a strong relationship with Kolkata-headquartered SREI Leasing and has cooperated with the company on its Moscow operations.

The EBRD was established in 1991 to support the transition to market economies of countries in Eastern Europe and the former Soviet Union. It has since extended its geographic reach and is also working to bolster the private sector in Turkey and in countries in North Africa and the Middle East as well as Cyprus and Greece.

ASSOCHAM was established in 1920 and now comprises over 400 chambers and trade associations and currently serves over 450,000 members across India. The latest agreement was signed with the chamber’s president-elect Sunil Kanoria.

'Bengal in London: Come to Bengal, Ride the Growth' is the theme behind a 62-member delegation led by chief minister Mamata Banerjee to London to present the state as a destination for UK investments.

Amit Mitra, the state's finance minister, said: “We are setting up systems in place. There has been a radical shift since 2010-11, when 760,000 work days were lost [due to labour strikes].

"By 2013, the number of working days lost came down to zero. It takes time for mind-sets to change but please come to Bengal and we can assure very clear worker management processes."

The minister also highlighted the state’s “transparent” process of e-services introduced at all levels, including tax collection, tenders and other areas of services at an event organised by the UK India Business Council (UKIBC).

“The World Bank has cleared funds for Hooghly riverfront regeneration. We do competitive, transparent, e-based bidding and the UK has the expertise so it must connect up on this project,” he said.

Energy, education, smart cities projects and small and medium enterprises (SMEs) were the other key sectors highlighted by the West Bengal team as offering great potential for partnerships between the state and UK.

“States are the building blocks of India’s growth and Prime Minister Modi has recognised this in providing a larger role to the states. West Bengal, with its dynamic chief minister and able team, is attracting investors like never before. Doing business in Bengal today is easier, simpler and faster,” said Dr Jyotsna Suri, chairperson of the Bharat Group and president of the Federation Chambers of Commerce and Industry (FICCI).

Sumit Mazumder, chairman and managing director of TIL Limited and president of the Confederation of Indian Industry (CII), added: “West Bengal is a state with a GDP higher than the national average of the country. It offers lots of opportunities. I urge you to come and find out for yourself.”

The two sides have also clinched 21 MoUs across the fields of industry, health, education and urban development today.

The agreements were signed during her bilateral meeting with Britain’s minister of state for employment and British Prime Minister David Cameron’s Indian Diaspora Champion, Priti Patel, at a reception hosted at the Foreign and Commonwealth Office (FCO) in London.

“This is a landmark visit… These MoUs will help bring the UK and West Bengal ever closer, and unleash the potential of our relationship,” Patel said.

Tata Motors' owned Jaguar Land Rover (JLR) is planning to set up a new plant in Eastern Europe and is zeroing in on Poland.

JLR executives have been weighing up bids from Slovakia, Hungary, the Czech Republic and Turkey for the factory, which will make about 200,000 cars a year, and Poland had offered “huge” incentives, media reports indicate.

Jaguar produced about 450,000 vehicles last year, but plans to expand to 1 million. The huge expansion drive has seen its three British factories in Solihull, Castle Bromwich and Halewood pushed to capacity. The company opened a factory in China last year and another is under construction in Brazil.

A decision on Poland could be announced within weeks, although sources said Slovakia remained an outside possibility. Local reports suggested the plant could be built in Krakow at a cost of about £1.2 billion.

Next on the list is expected to be a factory in America or Mexico. The overseas drive reflects Jaguar’s desire to increase production while keeping costs in check.Poland offers a source of skilled and affordable labour, a ready-made supply chain and a government prepared to offer significant launch aid.

A JLR statement said: “Jaguar Land Rover continues to evaluate opportunities around the world. Europe is just one of the places under consideration. No decisions have been taken.”

The company had recently signed a contract manufacturing agreement with Austrian automotive firm Magna Steyr to enhance its worldwide production line.

Magna Steyr, an operating unit of Magna International Inc, will build some future JLR vehicles in Graz, Austria, under the latest collaboration, aimed at creating additional volumes needed to support the company’s plans to achieve further growth.

Prime Minister Narendra Modi recently launched the ambitious Skill India Mission to impart vocational training to 400 working age Indians by 2022. By then, an estimated 600 million Indians will be in that group, ie, between the ages of 15 and 59. That means, in seven years, India will have 28 per cent of the global workforce making India the country with the largest pool of workers.

This is the basis of the much-talked-about demographic dividend. But given the fact that a vast majority – estimated at 96 per cent – is unskilled, there is a very real danger of this huge but untrained workforce becoming a demographic drag.

That’s where the Prime Minister’s skills mission comes in. By offering heavily subsidised loans for vocational courses, the government hopes to bridge this skills gap and make India’s existing workforce as well as the 12 million youngsters who enter the employment age every year job-ready.

But are the ITIs, which are mandated to impart such skills up to the task? A cursory look at their track record does not inspire confidence. First, their courses are completely outdated. For example, it has been reported that many ITIs still train automobile technicians on carburettors. This technology was phased out by the auto industry almost two decades ago.

Then, by the government’s own estimates, the real estate, wellness, transport, beauty and retail industries are expected to generate the maximum demand for skilled workers. But the ITIs are not yet geared towards skilling people in these areas.

Finally, the 10,000 ITIs across the country need about 75,000 trainers. In reality, they have only 4,500. Many ITIs are almost defunct and most have inadequate infrastructure and facilities. A scheme for industries to adopt ITIs in their areas of operation to train workers for their own requirements has not produced the desired results.

The government is admittedly spending huge sums of money to upgrade these institutions and bring them up to the required standards but that will take time.

A comparison with other countries will expose the enormity of the task at hand. Almost 96 per cent of the South Korean workforce is skilled. In Japan, the figure is 80 per cent, in Germany 74 per cent and in China, it is 47 per cent. The comparable figure in India is 3.5 per cent.

This is where another related initiative of the government can lend a helping hand. The NDA government amended the Apprenticeship Act to make it easier for companies to recruit youngsters as apprentices while making it more lucrative for latter to opt for this route to employment.

Under this scheme, fresh school, high school or college graduates join companies as apprentices, receive on the job training, receive stipends and, on completion of their training, are usually absorbed into the company they train with. Alternatively, they can find employment with other companies in the same or related field.

Most importantly, neither the trainees, nor the government spend a single rupee on their training. Industry finances the training of their workforce, making this a self-sustaining model. China has 20 million such apprentices, Japan 10 million and Germany six million.

By comparison, India has less than 300,000 apprentices, while Indian industry has a capacity to absorb about half a million such trainees.

This is clearly inadequate, given India’s population as well as its workforce.

So, the way forward should be a combination of apprenticeship and skills development at ITIs. A start has been made. Implementing it properly will hold the key to success.

A UK-based company has plans to roll out clean cold technology in India to help the country tackle its food crisis.

Dearman is working on developing new technologies to achieve movement of perishable produce through an integrated chain of refrigerated transport and refrigerated storage, broadly referred to as a cold chain.

Dearman CEO Toby Peters explained: “At present, India has approximately 31 million tonnes of cold chain capacity, which is vast, but only approximately 9,000 refrigerated vehicles. That imbalance has to be rectified because when looking to feed a population, to maximise the economic return for producers and to supply vital medicines, the objective is to move goods efficiently from production to consumer, and that requires a network of vehicles.

“Dearman is working with institutions in the UK, including the newly announced Energy Research Accelerator, to not only develop new technologies but to establish a blueprint for manufacturing facilities which can then be established around the world… We hope to have a field trial of our zero emission transport refrigeration system in India next year, leading to an ever greater presence in the Indian market thereafter.”

India is the world’s largest producer of milk and the second-largest producer of fruit and vegetables. Yet it is home to more than 25 per cent of the world’s hungry poor. The lack of a reliable, integrated cold chain across the country is a significant contributing factor to this loss of food, a panel discussion at a House of Lords committee room highlighted.

Pawanexh Kohli, chief advisor to India’s National Centre for Cold Chain Development, suggested that to make proper use of the cold chain infrastructure already available in India, an additional 60,000 refrigerated trucks are needed immediately, just to transport food from the field to the major cities.

“Factoring in projected growth in Indian cold infrastructure in the years to come and continued growth in demand, the need for new refrigerated vehicles could be much, much higher,” he said.

The Indian National Centre for Cold Chain Development projects the need to spend more than $20 billion on cold chain infrastructure, of which almost 50 per cent will be needed for refrigerated transport.

In a proposal that may spark off a fresh round of friction between the Reserve Bank of India (RBI) and the central government, the revised draft of the Indian Financial Code (IFC) strips the RBI governor of his veto power over interest rates.

An earlier draft, which had proposed that the government would nominate three members, the RBI one and that two other members would be selected in consultation with the central bank, had given the apex bank chief the powers to overrule the committee’s decision on interest rates in “exceptional and unusual circumstances”. The current draft does away with that authority.

Recently, RBI governor Raghuram Rajan had overruled the majority opinion in the committee to cut rates further. It may be mentioned that the RBI has cut rates thrice, by 25 basis points (bps; 100 bps = 1 percentage point) each, this year but there are demands for further and deeper cuts to stimulate the Indian economy, which seems to be stubbornly defying all efforts to accelerate the growth rate.

Further emasculating the role of the RBI in setting interest rates for the economy, the IFC gives the government the right to nominate four members to the Monetary Policy Committee that decides on key policy rates. The RBI will get to nominate two members, excluding the governor. The central bank governor, however, has been given a casting vote in case of a deadlock.

The next RBI monetary policy is due on August 4.

It is no secret that the NDA government and its predecessor UPA-II regime have had reasons to be unhappy with RBI for not lowering interest rates to push growth but both Finance Minister Arun Jaitley and RBI governor Raghuram Rajan have taken pains to dispel rumours of any serious discord over the issue.

The new code also provides for the RBI and the government to jointly decide the inflation target once every three years.

The IFC draft, however, does address some of RBI’s concerns by doing away with the powers of the proposed Financial Sector Appellate Tribunal to review regulations.

India’s Reliance Industries and Tata Motors lead the private sector charge for India among the 500 largest companies in the world for 2015.

‘Fortune’ magazine’s definitive ‘Global 500’ found state-run Indian Oil as the most valuable Indian firm, ranked 119th with revenues around $74 billion.

Reliance Industries comes in next at 158 with $62 billion, Tata Motors with revenues of $42 billion at 254, State Bank of India (SBI) with revenues of $42 billion at 260, Bharat Petroleum with revenues of $40 billion at 280, Hindustan Petroleum with revenues of $35 billion further down at 327 and Oil and Natural Gas Corporation (ONGC) with $26 billion at the bottom of the Indian tally at 449.

In ‘Fortune’s’ calculations, which account for total revenues for the fiscal year that ended before in March 2015, Walmart comes out tops with a whopping $485 million in revenues. It is followed by Chinese petroleum refining giant Sinopec Group, Netherlands-based Royal Dutch Shell in third place, China National Petroleum at fourth and Exxon Mobil completing this year’s top 5.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014.

This year's ‘Global 500’ employ 65 million people worldwide and are represented by 36 countries between them. The US is home to 128 of the 500 global companies, including well-known brand names like Apple (15), JP Morgan Chase (61), IBM (82), Microsoft (95), Google (124), Pepsi (141), Intel (182) and Goldman Sachs (278).

China has close to 100 companies on the list, including Bank of China (45), China Railway Engineering (71) and China Development Bank (87).

As part of the annual rankings, revenue figures include consolidated subsidiaries and reported revenues from discontinued operations, but exclude excise taxes.